Stark Investments is planning to launch a new hedge fund, Hedge Fund Alert reports. The RMBS CDS Opportunity Fund will use credit-default swaps to short subprime mortgage-backed securities.
Stark has already secured $150 million in verbal commitments for the vehicle. The proposed fund is designed to profit from a small window, of months long, to short the subordinate tranches of particular MBS issues suffering from severe loss rates. Stark has about $3 billion in assets under management.
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